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Retainage · Arkansas

Arkansas retainage law: 5% public cap, 30-day release (2026)

By Sami Chicha, EditorUpdated Checked against primary sources · not yet reviewed by a licensed professionalFact-checked
Quick answer

On an Arkansas public construction contract requiring a performance bond, the agency pays 95% of earned progress payments and retains 5%, holds it in escrow and pays it within 30 days after substantial completion (Ark. Code Ann. § 22-9-604). Materials the contract requires to be stored on site or in a bonded warehouse carry no retainage. Private work has no statewide retainage statute; the contract governs.

Private work

Arkansas · Private workVerified 2026-09-22
Retainage cap
No statewide statute
No statewide statute governs retainage on private construction projects. Arkansas's retainage subchapter (Ark. Code §§ 22-9-601 to 22-9-604) sits in Title 22 'Public Property', Chapter 9 'Public Works', and by its terms applies to 'a construction contract entered into between a public agency and a contractor who is required to furnish a performance bond'.
Deadline
No statewide statute
Statute
No statewide statute

Public work

Arkansas · Public workVerified 2026-09-22
Retainage cap
5%
Ark. Code § 22-9-604(a)(1), as amended by Act 193 of 2009: the contractor is entitled to 95 percent of earned progress payments, with the public agency retaining 5 percent. No retainage may be withheld on the portion of a progress payment covering materials or equipment the contract requires the contractor to purchase and store on the job site or in a bonded warehouse (§ 22-9-604(c)). Applies where the contractor is required to furnish a performance bond.
Deadline
30 days
All sums withheld are held in escrow and must be paid to the contractor within 30 days after the construction contract has been substantially completed. Separately, where the contract allows phased work with completion on partial occupancy, retention must be partially released within 30 days in direct proportion to the value of the completed part of the capital improvement.
Statute
Ark. Code Ann. § 22-9-604, the 5% cap from Act 193 of 2009, § 10; the escrow and 30-day release from Act 471 of 2007, § 3.
What the statute says
In the case of a construction contract entered into between a public agency and a contractor who is required to furnish a performance bond, the contractor shall be entitled to payment of ninety-five percent (95%) of the earned progress payments when due, with the public agency retaining five percent (5%) to assure faithful performance of the contract.
Ark. Code Ann. § 22-9-604, the 5% cap from Act 193 of 2009, § 10; the escrow and 30-day release from Act 471 of 2007, § 3. · Archived copy of the official text, captured 2025-10-12

Who this applies to

Arkansas's retainage statute is written for one kind of job: a construction contract between a public agency and a contractor who has to furnish a performance bond [1]. On those contracts it limits what the agency may hold back from the contractor's earned progress payments and fixes when the money comes back.

Private construction sits outside it. Section 22-9-604 belongs to the Public Works chapter of the Public Property title and speaks to contracts with a public agency [2], and no statewide statute caps retainage or dates its release on a private job. There, the retainage clause the parties signed is the rule, and a lawyer is the person to read it with.

This page covers the agency's side of the ledger. What a prime contractor may withhold from its own subcontractors on the same public job is a question for the subcontract and a lawyer.

What the rule says

Each earned progress payment on a covered contract divides 95/5: the contractor receives 95% when the payment falls due and the agency keeps 5% [1] to assure faithful performance. No retainage comes off the part of a payment that covers materials or equipment the contract requires the contractor to buy and store, whether on the job site or in a bonded warehouse [2]. Everything the agency withholds is held in escrow and goes to the contractor within 30 days [2] after the contract is substantially completed.

How to comply

On a public contract, set the contract documents beside the statute:

On a private contract there is no statute to lay beside the clause. The percentage, any reduction and the payout date are whatever the signed contract says, and a lawyer is the one to read them against Arkansas law.

What changed recently

Act 471 of 2007, § 3, approved March 23, 2007, set out § 22-9-604 with the escrow requirement and the 30-day payout [2]. Act 193 of 2009, § 10, approved February 19, 2009, moved the split from 90%/10% to 95%/5% and deleted the 50%-completion step-down [1].

Related

Run the numbers for Arkansas

How retainage is held on each payment and when it comes back: Retainage in construction. Bill it on the pay application template, which carries retainage on work and on stored materials.

Retainage laws: other states

Sources

  1. Act 193 of 2009 (SB 302), § 10, amending Ark. Code § 22-9-604(a), Arkansas General Assembly (retrieved 2026-09-22)
  2. Act 471 of 2007 (HB 2585), § 3, setting out Ark. Code § 22-9-604 in full, Arkansas General Assembly (retrieved 2026-09-22)
  3. Act 193 of 2009 (SB 302), § 10, amending Ark. Code § 22-9-604(a), Arkansas General Assembly (archived copy, captured 2025-10-12)
  4. Act 471 of 2007 (HB 2585), § 3, Ark. Code § 22-9-604 escrow and 30-day release, Arkansas General Assembly (archived copy, captured 2025-08-08)

Changelog

  1. : 1 more jurisdiction verified and published, 47 of 51 in all.
  2. : California private work corrected: Civ. Code § 8811 (SB 61) caps retention at 5% for contracts entered into on or after January 1, 2026; the row had said no cap.
  3. : Missouri private work corrected: Mo. Rev. Stat. §§ 436.300 to 436.336 cap private retainage at 10% and require release within 30 days of substantial completion; the row had said no private retainage rule.
  4. : Tennessee corrected: Tenn. Code Ann. § 66-34-203 caps owner-to-prime retainage at 5% of the contract, on public and private work; escrow applies to prime contracts of $500,000 or more, and the $300-a-day damages do not apply to public owners.
  5. : Idaho private work added: Idaho Code § 29-115 caps private retention at 5% and requires release within 35 days of final completion; the row had left private work out.
  6. : Rhode Island corrected: the 5% cap in R.I. Gen. Laws § 37-12-10.1 also covers private lienable work of $250,000 or more, and a retainage application may be submitted only 60 days after substantial completion unless the contract allows earlier.
  7. : Oklahoma public work corrected: since November 1, 2022, 61 O.S. §§ 113.1 and 226 reduce retainage to 2.5% of the amount earned to date after 50% completion with satisfactory progress, with no bond condition.
  8. : Montana public work corrected: state and local public contracts are capped at 5% under Mont. Code Ann. § 18-2-316, and final payment on building contracts is due within 30 days of final acceptance (§ 18-2-306).
  9. : Delaware public work corrected: 29 Del. C. § 6516(f)(3) requires retainage to be paid within 60 days after completion or notice of completion, with interest available from the 61st day; the row had no release deadline.
  10. : District of Columbia corrected: D.C. Code § 2-203.01 requires a 10% retent on District construction contracts until completion and acceptance, and the Private Contractor and Subcontractor Prompt Payment Act counts retainage as an undisputed amount due on its schedule; both rows had said no statute.
  11. : Colorado private work updated: HB26-1311 lets a contractor or subcontractor tender a retainage bond of up to 5% in lieu of retainage on contracts from August 12, 2026, and the owner must accept a compliant bond.
  12. : Kentucky private work updated: 2025 Ky. Acts ch. 156 raised the KRS 371.160 escrow threshold to $2,000,000 and barred waiving it by contract.
  13. : 10 more jurisdictions verified and published, 46 of 51 in all.
  14. : Page published.
  15. : Dataset first published with 36 of 51 jurisdictions verified.